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ON THIS PAGE:
> India — Patents (US), paras. 65-67
> Brazil — Aircraft (Article 21.5 — Canada), para. 46
> US — Shrimp (Article 21.5 — Malaysia), paras. 94-95
> US — Hot-Rolled Steel, para. 200
> US — Section 211 Appropriations Act, paras. 105-106
> US — Line Pipe, para. 158
> US — Offset Act (Byrd Amendment), para. 259
> US — Carbon Steel, para. 157
> US — Corrosion—Resistant Steel Sunset Review, para. 168
> US — Softwood Lumber IV, para. 56
> US — Oil Country Tubular Goods Sunset Reviews, para. 187
> US — Gambling, paras. 361—362
> US — Gambling, para. 364
> Dominican Republic — Import and Sale of Cigarettes, para. 112
> Dominican Republic — Import and Sale of Cigarettes, para. 114
> US — Softwood Lumber IV (Article 21.5 — Canada), para. 82
> China — Auto Parts, paras. 224—225 and footnote 306
> US — Zeroing (Japan) (Article 21.5 — Japan), footnote 452 to para. 175
> China — Publications and Audiovisual Products, paras. 177-178
> China — Publications and Audiovisual Products, para. 187
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M.5.1 India — Patents (US), paras. 65-67 back to top
(WT/DS50/AB/R)
In public international law, an international tribunal may treat
municipal law in several ways. Municipal law may serve as evidence of
facts and may provide evidence of state practice. However, municipal law
may also constitute evidence of compliance or non-compliance with
international obligations. For example, in Certain German Interests
in Polish Upper Silesia, the Permanent Court of International
Justice observed:
It might be asked whether a difficulty does not arise
from the fact that the Court would have to deal with the Polish law of
July 14th, 1920. This, however, does not appear to be the case. From the
standpoint of International Law and of the Court which is its organ,
municipal laws are merely facts which express the will and constitute
the activities of States, in the same manner as do legal decisions and
administrative measures. The Court is certainly not called upon to
interpret the Polish law as such; but there is nothing to prevent the
Court’s giving judgment on the question whether or not, in applying
that law, Poland is acting in conformity with its obligations towards
Germany under the Geneva Convention. (emphasis added)
… It is clear that an examination of the relevant aspects of Indian municipal
law … is essential to determining whether India has complied with
its obligations under Article 70.8(a). There was simply no way for the
Panel to make this determination without engaging in an examination of
Indian law. But, as in the case cited above before the Permanent Court
of International Justice, in this case, the Panel was not interpreting Indian law “as such”; rather, the Panel was
examining Indian law solely for the purpose of determining whether India
had met its obligations under the TRIPS Agreement. …
Previous GATT/WTO panels also have conducted a detailed examination
of the domestic law of a Member in assessing the conformity of that
domestic law with the relevant GATT/WTO obligations. …
M.5.2 Brazil — Aircraft (Article 21.5 — Canada), para. 46 back to top
(WT/DS46/AB/RW)
We note Brazil’s argument before the Article 21.5 Panel that Brazil
has a contractual obligation under domestic law to issue PROEX bonds
pursuant to commitments that have already been made, and that Brazil
could be liable for damages for breach of contract under Brazilian law
if it failed to respect its contractual obligations. In response to a
question from us at the oral hearing, however, Brazil conceded that a
WTO Member’s domestic law does not excuse that Member from fulfilling
its international obligations. Like the Article 21.5 Panel, we do not
consider that any private contractual obligations, which Brazil may have
under its domestic law, are relevant to the issue of whether the DSB’s
recommendation to “withdraw” the prohibited export subsidies permits
the continued issuance of NTN-I bonds under letters of commitment issued
before 18 November 1999.
M.5.3 US — Shrimp (Article 21.5 — Malaysia), paras. 94-95
(WT/DS58/AB/RW) back to top
The CIT ruling in the Turtle Island case addressed the Revised
Guidelines: that ruling made no change to the interpretation of Section
609. Moreover, as stated by the Panel, the ruling in the Turtle
Island case is declaratory: the CIT has not ordered the United
States Department of State to modify either the content or the
interpretation of the Revised Guidelines; in the legal interpretation of
the United States authorities entrusted with enforcing them, the Revised
Guidelines remain the same. Rightly, when examining the United States
measure, the Panel took into account the status of municipal law at the
time. In particular, the Panel took note of the fact that the CIT ruling
in the Turtle Island case has not altered the content of the
Revised Guidelines, and has not prevented the United States government
from authorizing the importation of TED-caught shrimp from uncertified
countries. In response to our questions at the oral hearing, the United
States confirmed that the Department of State has received no order from
the CIT to change its practice, and, therefore, the Department of State
continues to apply the Revised Guidelines as before. Malaysia has not
shown otherwise.
There is no way of knowing or predicting when or how that particular
legal proceeding will conclude in the United States. The Turtle
Island case has been appealed and could conceivably go as far as the
Supreme Court of the United States. It would have been an exercise in
speculation on the part of the Panel to predict either when or how that
case may be concluded, or to assume that injunctive relief ultimately
would be granted and that the United States Court of Appeals or the
Supreme Court of the United States eventually would compel the
Department of State to modify the Revised Guidelines. The Panel was correct not
to indulge in such speculation, which would have been contrary to the
duty of the Panel, under Article 11 of the DSU, to make “an objective
assessment of the matter … including an objective assessment of the
facts of the case”.
M.5.4 US — Hot-Rolled Steel, para. 200 back to top
(WT/DS184/AB/R)
Although it is not the role of panels or the Appellate Body to
interpret a Member’s domestic legislation as such, it is permissible,
indeed essential, to conduct a detailed examination of that legislation
in assessing its consistency with WTO law. …
M.5.5 US — Section 211 Appropriations Act, paras. 105-106
(WT/DS176/AB/R) back to top
Our rulings in these previous appeals are clear: the municipal law of
WTO Members may serve not only as evidence of facts, but also as
evidence of compliance or noncompliance with international obligations.
Under the DSU, a panel may examine the municipal law of a WTO Member for
the purpose of determining whether that Member has complied with its
obligations under the WTO Agreement. Such an assessment is a
legal characterization by a panel. And, therefore, a panel’s
assessment of municipal law as to its consistency with WTO obligations
is subject to appellate review under Article 17.6 of the DSU.
To address the legal issues raised in this appeal, we must,
therefore, necessarily examine the Panel’s interpretation of the
meaning of Section 211 under United States law. … The meaning
given by the Panel to Section 211 is, thus, clearly within the scope of
our review as set out in Article 17.6 of the DSU.
M.5.6 US — Line Pipe, para. 158 back to top
(WT/DS202/AB/R)
… we are not concerned with how the competent authorities of WTO
Members reach their determinations in applying safeguard measures. The Agreement
on Safeguards does not prescribe the internal decision-making
process for making such a determination. That is entirely up to WTO
Members in the exercise of their sovereignty. We are concerned only with
the determination itself, which is a singular act for which a WTO Member
may be accountable in WTO dispute settlement. It is of no matter to us
whether that singular act results from a decision by one, one hundred,
or — as here — six individual decision-makers under the municipal
law of that WTO Member. What matters to us is whether the determination,
however it is decided domestically, meets the requirements of the Agreement
on Safeguards.
M.5.7 US — Offset Act (Byrd Amendment), para. 259 back to top
(WT/DS217/AB/R, WT/DS234/AB/R)
… We note that the Panel referred to the “Findings of Congress”,
not as a basis for its conclusion that the CDSOA constitutes a
specific action against dumping or subsidies, but rather as a consideration confirming that conclusion.
We agree with the Panel that the intent, stated or otherwise, of the
legislators is not conclusive as to whether a measure is “against”
dumping or subsidies under Article 18.1 of the Anti-Dumping Agreement
or Article 32.1 of the SCM Agreement. Thus, it was not
necessary for the Panel to inquire into the intent pursued by United
States legislators in enacting the CDSOA and to take this into account
in the analysis. The text of the CDSOA provides sufficient information
on the structure and design of the CDSOA, that is to say, on the manner
in which it operates, to permit an analysis whether the measure is “against”
dumping or a subsidy. …
M.5.8 US — Carbon Steel, para. 157 back to top
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)
… a responding Member’s law will be treated as WTO-consistent
until proven otherwise. The party asserting that another party’s
municipal law, as such, is inconsistent with relevant treaty obligations
bears the burden of introducing evidence as to the scope and meaning of
such law to substantiate that assertion. Such evidence will typically be
produced in the form of the text of the relevant legislation or legal
instruments, which may be supported, as appropriate, by evidence of the
consistent application of such laws, the pronouncements of domestic
courts on the meaning of such laws, the opinions of legal experts and
the writings of recognized scholars. The nature and extent of the
evidence required to satisfy the burden of proof will vary from case to
case.
M.5.9 US — Corrosion—Resistant Steel Sunset Review,
para. 168
(WT/DS244/AB/R) back to top
When a measure is challenged “as such”, the starting point for an
analysis must be the measure on its face. If the meaning and content of
the measure are clear on its face, then the consistency of the measure
as such can be assessed on that basis alone. If, however, the meaning or
content of the measure is not evident on its face, further examination
is required. …
M.5.10 US — Softwood Lumber IV, para. 56 back to top
(WT/DS257/AB/R)
… we observe that the arguments put forward by Canada relating to
the nature of “personal property”, raise issues concerning the
relevance, for WTO dispute settlement, of the way in which the municipal
law of a WTO Member classifies or regulates things or transactions.
Previous Appellate Body Reports confirm that an examination of municipal
law or particular transactions governed by it might be relevant, as
evidence, in ascertaining whether a financial contribution exists.
However, municipal laws — in particular those relating to property —
vary amongst WTO Members. Clearly, it would be inappropriate to
characterize, for purposes of applying any provisions of the WTO covered
agreements, the same thing or transaction differently, depending on its
legal categorization within the jurisdictions of different Members. Accordingly, we emphasize that municipal law
classifications are not determinative of the issues raised in this
appeal.
M.5.11 US — Oil Country Tubular Goods Sunset Reviews, para. 187
(WT/DS268/AB/R) back to top
We note the argument of the United States that the SPB is not a legal
instrument under United States law. This argument, however, is not
relevant to the question before us. The issue is not whether the SPB is
a legal instrument within the domestic legal system of the United
States, but rather, whether the SPB is a measure that may be challenged
within the WTO system. The United States has explained that, within the
domestic legal system of the United States, the SPB does not bind the
USDOC and that the USDOC “is entirely free to depart from [the] SPB at
any time”. However, it is not for us to opine on matters of United
States domestic law. Our mandate is confined to clarifying the
provisions of the WTO Agreement and to determining whether the
challenged measures are consistent with those provisions. …
M.5.12 US — Gambling, paras. 361-362 back to top
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)
… according to Antigua, the IHA, on its face, authorizes domestic
service suppliers, but not foreign service suppliers, to
offer remote betting services in relation to certain horse races. To
this extent, in Antigua’s view, the IHA “exempts” domestic service
suppliers from the prohibitions of the Wire Act, the Travel Act, and the
IGBA.
The United States disagreed, claiming that the IHA
— a civil
statute — cannot “repeal” the Wire Act, the Travel Act, or the
IGBA — which are criminal statutes — by implication, that is,
merely by virtue of the IHA’s adoption subsequent to that of
the Wire Act, the Travel Act, and the IGBA. Rather, under principles of
statutory interpretation in the United States, such a repeal could be
effective only if done explicitly, which was not the case with
the IHA.
M.5.13 US — Gambling, para. 364 back to top
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)
… the United States’ appeal essentially challenges the Panel’s
failure to accord sufficient weight to the evidence submitted by the
United States with respect to the relationship under United States law
between the IHA and the measures at issue. The Panel had limited
evidence before it, as submitted by the parties, on which to base its
conclusion. This limitation, however, could not absolve the Panel of its
responsibility to arrive at a conclusion as to the relationship between
the IHA and the prohibitions in the Wire Act, the Travel Act, and the
IGBA. The Panel found that the evidence provided by the United States
was not sufficiently persuasive to conclude that, as regards wagering on
horseracing, the remote supply of such services by domestic firms
continues to be prohibited notwithstanding the plain language of the IHA.
In this light, we are not persuaded that the Panel failed to make an
objective assessment of the facts.
M.5.14 Dominican Republic — Import and Sale of Cigarettes, para.
112
(WT/DS302/AB/R) back to top
Against this background, and consistent with the view expressed by
the Appellate Body in US — Carbon Steel, we agree with Honduras
that consideration of the express wording of the text of legislation
establishing a measure is a fundamental element of an assessment of that
legislation. That said, however, we see no merit in the proposition
advanced by Honduras that a panel must limit itself, in considering a
claim against legislation as such, exclusively to the wording of
legislation itself. Indeed, in US — Carbon Steel, the Appellate
Body recognized that different types of evidence may support assertions
as to the meaning and scope of an impugned measure. A panel enjoys a
margin of discretion in weighing such evidence, commensurate with its
role as trier of fact.
M.5.15 Dominican Republic — Import and Sale of Cigarettes, para.
114
(WT/DS302/AB/R) back to top
Finally, we observe that the situation in this appeal is different
from that prevailing in India — Patents (US), upon which
Honduras relies. India — Patents (US) was a case in which
certain “administrative instructions” were held to be insufficient
evidence of India’s compliance with its obligations under the “mailbox”
requirements of the TRIPS Agreement, whereas certain legislative
provisions were clearly inconsistent with those obligations. The panel
and the Appellate Body were not required in India — Patents (US) to
interpret the words of the relevant legislation alone, in
isolation from other evidence, as Honduras would have had the Panel do
in this case. Indeed, in India — Patents (US), there was a
considerable amount of evidence available regarding the proper
interpretation of the express terms of the Indian Patents Act, which
included, but was not limited to, the text of the legislation itself.
The panel in that case was thus able to balance India’s assertion that
its “administrative instructions” — which required officials to
disregard certain mandatory provisions of the Patents Act — were
sufficient to implement India’s WTO obligations, against evidence that
the Indian government itself considered that legislative amendment was
necessary. Thus, in India — Patents (US), the panel made full
use of the record that was before it. Although the record in that case
appears to have been considerably richer than the one available in these
proceedings (which appears to consist only of the text of the measure
and the letter from the Director-General of Internal Taxes), it appears
to us that the Panel in this case also considered all of the evidence
that was before it. Accordingly, although the facts of this case differ
from India — Patents (US), the panels in each case followed the
same — correct — approach in taking into account relevant factual
information presented by the parties.
M.5.16 US — Softwood Lumber IV (Article 21.5 — Canada), para.
82
(WT/DS257/AB/RW) back to top
… the United States emphasizes the separate nature of original
countervailing duty investigations and duty assessment proceedings, and
cites, inter alia, to its domestic law in this regard. Although
such references may be useful, the Appellate Body has already observed that municipal law classifications are not
determinative of issues raised in WTO dispute settlement proceedings. …
M.5.17 China — Auto Parts, paras. 224-225 and footnote 306
(WT/DS339/AB/R, WT/DS340/AB/R, WT/DS342/AB/R) back to top
In examining this issue, we first note that the participants appear
to disagree on the standard of review that we should apply to the Panel’s
findings regarding the scope and meaning of Articles 2(2) and 21(1) of
Decree 125. China submits that the Panel’s finding as to the
applicability of the charge imposed under the measures at issue to
imports of CKD and SKD kits is a matter of legal interpretation. The
United States, on the other hand, considers that a panel’s “constructions
of municipal law are factual determinations in WTO dispute settlement”.
This means, for the United States, that the Appellate Body may not
review such findings de novo, but must accord them the “same
deference as other types of factual findings made by panels in WTO
dispute settlement proceedings”.306
The Appellate Body has explicitly stated that the municipal law of
WTO Members may serve not only as evidence of facts, but also as
evidence of compliance or non-compliance with international obligations.
When a panel examines the municipal law of a WTO Member for purposes of
determining whether the Member has complied with its WTO obligations,
that determination is a legal characterization by a panel, and is
therefore subject to appellate review under Article 17.6 of the DSU. The
Appellate Body has reviewed the meaning of a Member’s municipal law,
on its face, to determine whether the legal characterization by the
panel was in error, in particular when the claim before the panel
concerned whether a specific instrument of municipal law was, as such,
inconsistent with a Member’s obligations. We recognize that there may
be instances in which a panel’s assessment of municipal law will go
beyond the text of an instrument on its face, in which case further
examination may be required, and may involve factual elements. With
respect to such elements, the Appellate Body will not lightly interfere
with a panel’s finding on appeal.
M.5.18 US — Zeroing (Japan) (Article 21.5 — Japan), footnote
452 to para. 175 back to top
(WT/DS322/AB/RW)
There was a debate between the participants at the oral hearing about
whether the United States’ executive branch can take actions in
connection with a periodic review that is the object of domestic
litigation during the pendency of those domestic judicial proceedings.
The United States indicated that the USDOC loses jurisdiction over a
periodic review while it is under review by the United States courts.
Japan asserted that the USDOC can request that the court return (or “remand”)
the case back to it. We note that whatever restrictions there are on the
United States’ executive branch taking actions during the pendency of
domestic judicial proceedings would derive solely from United States law and not from the text of Article
13 of the Anti-Dumping Agreement. Therefore, they would not provide a
basis for delaying compliance with the DSB’s recommendations and
rulings beyond the end of the reasonable period of time.
M.5.19 China — Publications and Audiovisual Products, paras.
177-178 back to top
(WT/DS363/AB/R)
We recall that a panel’s assessment of the meaning and content of a
Member’s municipal law is subject to appellate review in order to
determine whether the panel erred in its finding regarding the
consistency of the Member’s municipal law with the WTO agreements. For
example, in China — Auto Parts, the Appellate Body examined one
provision of a Chinese Decree, focusing on the text and context of the
relevant provision in the Decree and the overall “structure and logic”
of the Decree, so as to determine whether the legal characterization by
the panel was in error. At the same time, Article 17.6 of the DSU places
some constraints on the Appellate Body’s review of some elements of a
panel’s analysis of municipal law. Where, for instance, a panel
resorts to evidence of how a municipal law has been applied, the
opinions of experts, administrative practice, or pronouncements of
domestic courts, the panel’s findings on such elements are more likely
to be factual in nature, and the Appellate Body will not lightly
interfere with such findings. …
In this dispute, the issue of whether the Panel correctly
characterized Article 30 of the Film Regulation as subject to
China’s trading rights commitments is a legal issue within the scope
of these appellate proceedings.
M.5.20 China — Publications and Audiovisual Products, para. 187
(WT/DS363/AB/R) back to top
In addressing a claim that a panel mischaracterized a Member’s
municipal law, the Appellate Body is not limited to reviewing only those
provisions of the law explicitly examined by the panel. The Appellate
Body has, in prior disputes, examined specific provisions, in the light
of other provisions and the overall structure of the relevant municipal
law, so as to determine whether a panel properly construed that law. …
306. … Canada expressed a similar view at the oral hearing in this
appeal, stating that a panel’s interpretation of municipal law is a
matter of fact and is subject to the standard of review to be accorded
to factual findings. back to text
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